Interior announces new structure for regulating deepwater drilling

The Interior Department created two independent bureaus and an advisory panel on Wednesday as Secretary Ken Salazar announced widespread structural changes designed to streamline federal regulation and response to emergencies related to deepwater oil drilling.

In the third major reorganization since the April 2010 massive oil spill from BP's Macando well in the Gulf of Mexico, Salazar announced he was "deconflicting" what for three decades had been the Minerals Management Service, by breaking its successor bureau, created in May 2010, into two new entities: the Bureau of Ocean Energy Management will manage development of offshore resources through leasing and analysis of economic and environmental impact; and the Bureau of Safety and Environmental Enforcement will enforce regulations through permitting, inspections and oil spill response.

Joined at a press conference by Michael Bromwich, director of MMS's interim successor the Bureau of Ocean Energy Management, Regulation and Enforcement, Salazar also announced that Interior leaders also will receive technical advice from the new Offshore Energy Safety Advisory Committee. To be led by former Sandia National Laboratory Director Tom Hunter, the committee will consist of 13 representatives from federal agencies, industry, academia, the national labs and selected research organizations.

"As industry has moved deeper and deeper into the water, the technology and the instrumentation such as blowout preventers has not developed as fast," Salazar said. "So we need the best advice" from inside and outside of government.

Bromwich said the "former MMS was saddled with conflicting missions of promoting resource development, enforcing safety regulations and maximizing revenues from offshore operations. Those conflicts, combined with a chronic lack of resources," he said, "prevented the agency from fully meeting the challenges of overseeing industry operating in U.S. waters."

The changes "are enormous and will stress the agency as it is," Bromwich added, noting 11 implementation teams will work to complete the transition by Oct. 1. He said the reorganization, intended to allow permitting engineers and inspectors greater independence, budgetary autonomy and clearer focus for senior leadership, is consistent with President Obama's memorandum on integrity in agency decision-making in science and the environment.

In an earlier phase of what has been a nine-month reorganization process, a third new agency, the Office of Natural Resources Revenue, was created on Oct. 1, 2010.

The two Interior officials spoke to reporters at the 11th National Conference on Science, Policy and the Environment, which featured keynote speeches by the two chairs of President Obama's National Commission on the BP Horizon Oil Spill and Offshore Drilling -- former Sen. Bob Graham, D-Fla., and former Environmental Protection Agency head William Reilly.

Much of Interior's reorganization dovetails with that panel's 31 recommendations for improving regulation of offshore drilling, though some of the recommendations, such as appointing a strengthened director to a five- to seven-year term and subject to Senate confirmation, would require congressional action.

Tyson Slocum, director of the energy program for the advocacy group Public Citizen, called the changes "helpful," but said they were very similar to what was announced last summer. The administration is maxing out on what it can unilaterally do," he said. "We need Congress to step in and fill the considerable gaps."

Randall Luthi, president of a coalition of drilling companies called the National Ocean Industries Association, said: "Today's announcement may provide a bit more clarity, but seems to only add to the uncertainty…. "It seems that offshore operators will now need to communicate with one agency to obtain permits, but those permits will be reliant upon swift completion of environmental review by another agency, thus creating the possibility for further bureaucratic delay." He added, "The real test is whether or not a permit for new deepwater drilling is issued in the very near future."

Regan Nelson, senior oceans advocate for the Natural Resources Defense Council, praised the decision to create a Bureau of Safety and Environmental Enforcement as a "good first step," but also said Interior "needs to go further to ensure that safety and environmental concerns are insulated from the kind of political pressure that has compromised this crucial mission in the past."

A spokesman for Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee who in recent years held hearings on MMS, said the congressman is concerned that the changes might "be mostly public relations. We've talked to federal employees in the Gulf area who said no one contacted them about how the agency should be reorganized," he said. The officials in Washington simply could have made a dramatic announcement to address the outrage of the American people, he said, "and they're now trying to put the pieces together."

Update as of Jan. 20

After this story was published, Interior Department officials asked for an opportunity to rebut the allegation from Rep. Darrell Issa's staff that federal employees in the Gulf area were not consulted about the impending reorganization of MMS. "We received direct input from more than 500 employees through one-on-one interviews and small group meetings in each of our regional and district offices," BOEMRE spokesperson Melissa Schwartz told Government Executive, "and we have surveyed the entire staff" of 1,700.

The dispute stems in part from differing views of the chronology and the extent to which the reorganization had been finalized early on in the process.

Salazar on May 19, 2010, issued a secretarial order announcing plans to split the MMS into three bureaus. Bromwich was appointed on June 15, after which much of the research on implementing the restructuring got underway. From June 14-18, investigators from the committee now led by Issa traveled to the Gulf area and spoke to employees in federal regional and district offices in and around New Orleans.

Issa's staff said they stand by their previous statement. "MMS employees told investigators that they had not been consulted or afforded an opportunity to give input into the reorganization process prior to the May 19 announcement that MMS would be split into three different entities," a spokesman said. "This timeline suggests a backward approach to reforming the deep[ly] troubled agency. There is continued concern that having a big public relations announcement about splitting up the agency before critical input was collected may have prejudiced the problems and cut-off discussion of other strategies for reform."